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Introduction to Point & Figure and Candle Charting MTA EDUCATION SEMINAR 2005 May 20, 2005  By Kenneth G. Tower, CMT Chief Market Strategist, CyberTrader, Inc. Member NASD/SIPC. Recipient of the Market Technicians Association's “ Best of the Best ” Award in Point and Figure Chart Analysis.

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  1. Introduction to Point & Figure and Candle ChartingMTA EDUCATION SEMINAR 2005May 20, 2005 By Kenneth G. Tower, CMTChief Market Strategist, CyberTrader, Inc. Member NASD/SIPC • Recipient of the Market Technicians Association's “Best of the Best” Award in Point and Figure Chart Analysis.

  2. Intro to Point & Figure April 26 – May 6, 2005

  3. Point and Figure Charts: What Are They? Oldest form of charting in the US First written about by Charles Dow Named "Point and Figure" by Victor deVilliers Very Different from Bar Charts Not Time Based Based on Trading Activity

  4. Point and Figure Charts: How Can I Profit From Them? End Result: Very Clear Display of Support and Resistance Fewer Moving Average Whipsaws

  5. P & FChart Intro Chart Construction Example $1 box size, 1 box reversal 40 X ABCD trends up to 43: X X X 40 X ABCD then trends down to 39: X XO XO 40 XO O P&F FAQ When do you update the chart? When do you change columns? Where does the volume show up

  6. P & FChart Intro Chart Construction Example $1 box size, 1 box reversal 40 X ABCD trends up to 43: X X X 40 X ABCD then trades like this: X X XO X X X XOX XOXOX X X 40 XOXOXO OXOXOX O O O O O P&F FAQ What’s the Advantage? Some time periods are more important than others. Stock patterns linked directly to trading activity – better reflection of the forces of supply and demand.

  7. P & FChart Intro A big tech stock April 26 – May 6, 2005

  8. P & FChart Intro A big tech stock April 26 – May 6, 2005

  9. P & FChart Intro 10:42am May 4 – 9:57 May 6, 2005

  10. P & FChart Intro 7/23/02 – 5/12/2005 Base: $32 - $36 Aug ‘02 – June ‘03

  11. Introduction to Point & FigureChart Conclusion

  12. Intro to Candlestick Charts A well known tech stock March 15 – May 12, 2005

  13. Constructing the Candle Line Bullish Candle White Real Body Bearish Candle Black Real Body High High Upper Shadow Open Close Real Body Close Open Lower Shadow Low Low Chart courtesy of CandleCharts.com

  14. Drawing Candle Lines 28 SessionOpenHighLowClose 1 23 26 21 25 2 26 28 23 27 3 23 27 22 22 4 25 28 22 25 5 27 27 25 25 27 26 25 24 23 22 21 1 2 3 4 5 Chart Construction Example Chart courtesy of CandleCharts.com

  15. Bulls vs. Bears The Real Body is the essence of the price movement Who’s in control? Chart courtesy of CandleCharts.com

  16. Small Real Bodies:Spinning Tops Criteria: With small real bodies, known as “Spinning Tops,” color is not important. Implication: Signals that a prior trend may be losing force. Chart courtesy of CandleCharts.com

  17. Small Real Bodies:Doji Criteria: With a doji, the open and close prices are the same. Implication: A signal that the market is “tired”. Chart courtesy of CandleCharts.com

  18. Real Bodies Doji Spinning Top The green arrows show the bulls have control. The doji session altered this trend. Spinning Top DJ Industrial Avg ($DJI) Daily Candles, 6/9/99 to 7/30/99

  19. Intro to Candlestick Charts Info • More info from same data as bar charts • Use in concert with other technicals • Be careful about using intraday candles • ETFs more accurate than market averages • Many other patterns

  20. Intro to Candlestick Charts A well known tech stock March 15 – May 12, 2005

  21. Introduction to CandlestickChart Conclusion

  22. Introduction to Point & Figure and Candle ChartingMTA EDUCATION SEMINAR 2005May 20, 2005 By Kenneth G. Tower, CMTChief Market Strategist, CyberTrader, Inc. Member NASD/SIPC • Recipient of the Market Technicians Association's “Best of the Best” Award in Point and Figure Chart Analysis.

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